Canterbury Resources Share Price Rebounds on Increased Resource
The share price of copper-gold explorer Canterbury Resources Ltd [ASX:CBY] has rebounded nicely today with the company announcing the resource at its Wamum Project has been increased.
The CBY share price surged in late August when the explorer released its maiden resource estimate, sparking hope that the share price could be about to trend upwards.
Those hopes may have been dashed by now, with CBY shares fluttering around the 12.5-cent mark before trending downwards starting in October.
Although, we could see some optimism return.
At time of writing the CBY share price is up 3.09% to trade at 10 cents per share.
Wamum could become a standalone operation
CBY’s maiden resource estimate pegged the Wamum Project in PNG with an inferred resource of 2.2Moz of gold and 288kt copper at the Idzan Creek deposit, and 0.5Moz gold and 281kt copper at the Wamum Creek deposit.
The explorer delivered an increased estimate today based on the validation of additional historic data.
Total contained metal for the overall Wamum Project now stands at 3.16Moz gold and 762kt copper, representing an 11% increase for gold and 22% for copper.
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That is certainly a large amount of gold, so you might be wondering why there hasn’t been a much larger reaction in the share price.
There could be several reasons.
Firstly, the ‘inferred’ estimate is the lowest level of geological confidence.
According to the Australasian Code for Reporting Exploration, an inferred estimate is ‘estimated on the basis of limited geological evidence and sampling.’
Secondly, the political and sovereign risks associated with a country like PNG can be quite prominent, posing as significant obstacles during development.
However, CBY could be looking to go big at Wamum.
CBY Managing Director Grant Craighead said:
‘The additional data has enhanced the robustness of the Idzan Creek and Wamum Creek Mineral Resource estimates. The Board is very encouraged by the outcomes and consequently is planning to undertake a scoping study to assess the merits of developing a standalone operation. This work will be implemented once the tenement is granted and suitable partners are identified.’
What’s the outlook like the CBY share price?
There is still a considerable way to go before we could see any development begin at Wamum, though today’s announcement provides a decent foundation to build on.
CBY is yet to be granted an exploration licence for the project, which is currently before the he PNG Mining Advisory Council.
Once received, CBY has planned a scoping study to assess the potential development of a standalone mining operation, which is expected to take 12 months to complete.
Though CBY’s resources are attractive, it could be at least 12 months before we see any progress at the project. All the while there is plenty of action back on home soil. Aussie gold stocks are hinting at a boom as Australia looks to cement itself as the gold ‘epicentre’.
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For The Daily Reckoning Australia